Being a country that loves its coffee, it comes as little surprise that a caffeine hit is also good for the economy.

Possibly, that was a thought that crossed the mind of the federal treasurer, Joe Hockey, the morning after he delivered his first budget.

It's been dubbed the 'sipping revival', with consumers now preferring to channel their spare change towards actual consumption.

The lower Australian dollar has also seen cash be diverted from online shopping and overseas travel towards the local economy, mainly into household furnishings and bulky goods, reflecting the booming residential market.

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According to the latest numbers from the governement, coffee and eating out was the growth engine in retail sales.

In the March quarter, café and restaurants, sales were up 5.5 per cent, after growing by 5.4 per cent in the December quarter – marking the strongest back to back gains in a decade.

Micheal Bate, head of retail at Colliers International, said spending at cafes and restaurants has been the strongest component of retail trade over the past year, with annual growth running at 10.3 per cent.

''This is a clear indication that consumer caution has receded. This is also reflected in the growth of fast casual dining and the increasing popularity of laneways as retail destinations,'' Mr Bate said.

''This is particularly helpful to domestic growth, as unlike spending on imported goods, money spent eating out benefits the local economy. Geographically, retail trade growth has been strongest in Australia's two largest states – New South Wales and Victoria.''

Mr Bate said the growth was in line with strong house price appreciation in Sydney and Melbourne, and was indicative of the correlation between consumer spending and movements in house prices. It is also consistent with the growth transition from mining to non-mining states, with retail turnover in Western Australia relatively soft over the past year at 1.6 per cent.

Craig James, the chief economist at CommSec, attributed the gains to low and stable interest rates and the lift in wealth levels are supporting consumer spending.

''Add in the impact of the solid demand across the housing sector and it's no surprise that furniture, floor coverings, homeware and textile retailers are enjoying the benefits of a construction boom,'' Mr James said.

''In fact home improvement retail activity was the best performing category in the month and over the quarter lifted by a solid 5.4 per cent - marking the strongest quarterly growth in 11 years.''

The rise in the overseas tenants, such as Zara and the latest entrants, in Melbourne and later this year, Sydney, the Japanese Uniqlo and the Swedish H&M, has bought back shoppers to the central business districts.

Mr Bate said CBD's were now the ''new black''.

He said recent increases in retail turnover have been driven by a lift in discretionary spending.

''Particularly relevant to CBDs is the recovery in clothing and footwear (up 4.4 per cent for the year to February 2014), given this category comprises a significant proportion of retailers in the major CBD precincts,'' Mr Bate said.

''Also beneficial to CBD retailing is that expenditure at cafes and restaurants has been the strongest component of retail trade over the past year, with annual growth running at a buoyant 10.3 per cent. This is a clear indication that consumer caution has receded and that people are once again excited about retail and spending money.''